Скачать или смотреть What is a Convertible Note? How Does it Work? | Startup Funding Option Explained

In this video, Pat Mannix, Founder of Cotchy talks about what a Convertible Note is and the benefits. In your startup, if you’re aiming for your seed round, generally, so you got a bit of startup money, kicked everything off with maybe a couple of your co-founders or friends and family and you’re doing well, starting to develop your product, maybe getting some income coming in, but you can see that you need that seed round to get to the next level.

If you have any questions, chat to the team at Cotchy today! 📞😀💻

🔹www.cotchy.com.au🔸
💻Book a free consultation: https://calendly.com/support-1536/30min
📞Chat to the team: 1800 008 010
📧Email at: [email protected]

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In this video, Pat Mannix, Founder of Cotchy talks about what a Convertible Note is and the benefits.

In your startup, if you’re aiming for your seed round, generally, so you got a bit of startup money, kicked everything off with maybe a couple of your co-founders or friends and family and you’re doing well, starting to develop your product, maybe getting some income coming in, but you can see that you need that seed round to get to the next level.

Quite often, you will have a person either on your cap table already or a favoured investor looking to put in some money who's going to back you, but you're not ready to get the seed round and in a number of months to get it together, get out there and try to find a wider variety of private equity to make your seed happen. The instrument that works for you, is going to be a convertible note.

With a convertible note, you get that high equity person to put in some money, and that becomes a debt instrument, and then in nine to 12 months’ time, once your seed is about to convert into shares, that convertible note for the high equity investor converts to equity.

What is a convertible note? Well, it is a debt instrument.

Most likely it’s an agreement where your high equity investor puts in say, a million dollars to get onto your cap table ready for that seed round. There’s some cash to keep your startup kicking along, trying to get to the next level while you're organising the seed. Now that million dollars, will likely convert to something like say $1.2 - $1.5 million dollars in equity when the seed round converts in 9 – 12 months’ time. This investor is getting their equity at a lower rate by contributing some cash to you. Being a debt instrument, they’ll likely earn some interest and they will then convert 9-12 months later. It’s wonderful for you as a founder and your co-founders to get some finance in the door while you’re kicking along getting to that seed round number 1 and number 2 you’ve brought in a high equity investor which is great to put onto your Captable.

Another type of funding similar to this is a SAFE, a Simple Agreement for Future Equity, very similar to a convertible note however its pure equity and not a debt instrument. They can be a tremendous thing for your startup business.

Chat to the team at Cotchy today! 📞😀💻

🔹www.cotchy.com.au🔸
📞1800 008 010
📧[email protected]

Also, don’t forget to check us out on all the socials!

  / cotchy.io  
  / cotchy.io  
  / cotchy  
https://cotchy.com.au/

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